Volvo Group last week reported third-quarter sales were slightly more than SEK 68 billion (U.S. $10.5 billion), a 13-percent increase from SEK 60 billion (U.S. $9.3 billion), while operating profit of SEK 5 billion (U.S. $773 million) was in line with underlying earnings during the third quarter last year.
Diluted earnings per share in the third quarter were SEK 1.54 (U.S. $0.23), down from SEK 1.94 (U.S. $0.30) in the year-ago period.
“During the third quarter, we experienced continued split development in our markets,” said Leif Johansson, president and CEO. “Demand remained strong for the Volvo Group’s products and services in most of our markets in Europe, Asia and South America, while demand continued to be weak in North America.”
Sales in Asia increased through the contributions from the acquired companies Nissan Diesel, Lingong and Ingersoll Rand’s road development operations, combined with increased demand in most markets.
According to Johansson, Asia has developed into Volvo Group’s second largest market. “We currently have a significantly better balance in our geographic presence than previously,” Johansson said. “More than 40 percent of our sales were generated in markets outside Western Europe and North America, which have traditionally been our home markets. Our operations are now based on a strong global foundation, where growth in Eastern Europe and Asia are offsetting the much weaker trend in North America.”
Volvo Group has a strong construction equipment product portfolio, which it continues to grow at a rapid pace. Construction equipment sales rose 37 percent during the quarter. Profitability did not quite keep pace, but was negatively impacted by a labor conflict in South Korea and cost increases resulting from a production rate exceeding peak capacity.